Component Management Fails to Save Health Care System Costs: The Case of Restrictive Formularies

Authors: Levy, RA; Cocks, D.

The general failure of formularies and other limitations to contain total costs and improve outcomes has important implications for health care policy and the design of future health care delivery and reimbursement systems. This monograph, which reviewed literature through mid-1999 on the effects of restrictive formularies, shows that component management in the form of restrictions on pharmaceuticals does not result in overall savings. Instead, a system-wide, population-based approach integrating all components of health care is needed to control health care spending and maintain quality of care.

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